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Income Tax Appellate Tribunal, BENCH “C”,MUMBAI
Before: SHRI P.K.BANSAL & SHRI PAWAN SINGH
Order under Section 254(1) of Income Tax Act PER PAWAN SINGH, JM: 1. These two cross appeal u/s 253 of the Income-tax Act (‘Act’) is directed against the order of Ld. Commissioner of Income-tax (Appeals) [for short ‘the CIT(A)] –33, Mumbai dated 28.09.2012 for Assessment Years (AYs) 2009-10. As both the appeals are filed against the same order by both the parties. Thus, both the appeals 2 & 7240/M/2012 M/s Pratibha Pipes and Structural Consortium. were heard together and are being decided by a consolidated order to avoid the conflicting decision.
The assessee has raised the following grounds of appeal:
1. On the given facts, circumstances and judicial pronouncements; Hon. CIT (A) erred in deciding the appeal without giving proper opportunity of being heard to assessee; such order is erroneous in facts and bad in law and liable to be quashed.
2. On the given facts, circumstances and judicial pronouncements; Hon. CIT(A) erred in confirming the action of the Ld. Assessing Officer on account of treating difference between sales and purchases under head income from other sources; such addition is bad in law and liable to be deleted.
3. On the given facts, circumstances and judicial pronouncements; Hon. CIT(A) erred in confirming the action of the Ld Assessing Officer on account of holding the purchase and sale transaction as sham cum paper transaction; which is bad in law and erroneous in facts and liable to be reversed.
4. On the given facts, circumstances and judicial pronouncements; Hon. CIT(A) erred in confirming the addition made by Ld Assessing Officer on account of disallowing the interest on bill discounting facility which is bad in law and liable to be deleted.
5. On the given facts, circumstances and judicial pronouncements; Hon. CIT(A) erred in confirming the addition made by Ld Assessing Officer on account of disallowing the bank charges and commission which is bad in law and liable to be deleted.
6. On the given facts, circumstances and judicial pronouncements; Hon. CIT(A) erred in confirming the addition made by Ld Assessing Officer on account of disallowing the bank commission which is bad in law and liable to be deleted.
7. On the given facts, circumstances and judicial pronouncements; Hon. CIT(A) erred in confirming the addition made by Ld Assessing Officer on account of disallowing the auditor's remuneration which is bad in law and liable to be deleted.
8. On the given facts, circumstances and judicial pronouncements; Hon. CIT(A) erred in confirming the addition made by Ld Assessing Officer on account of disallowing the printing and stationery which is bad in law and liable to be deleted.
9. On the facts and circumstances of the case and judicial proposition, Ld. CIT (Appeals) erred in treating the benefit of sales tax set off taken by assessee as income and tax it under the head 'Income from Other Sources' without giving any notice under section 251 which is bad in law and erroneous in facts and liable to be quashed.
The Revenue has raised the following grounds of appeal:
3 & 7240/M/2012 M/s Pratibha Pipes and Structural Consortium. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing relief to the assessee to the extent impugned in the grounds enumerated below:
1.
On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to verify the sales tax set-off availed by the assessee by looking into the returns filed with the sales tax department, thus setting aside the assessment order without explicitly mentioning the same. 2 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the Ground No 1 as allowed in contrary to the discussion in the appellate order that the whole transaction of the assessee is sham and fraudulent.
3. On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in not dismissing the assessee's appeal.
4. The appellant prays that the order of the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored.
4. First we are taking ITA No 6940/M/2012 appeal filed by the assessee. Brief facts of the case are that the assessee filed return of income for relevant AY on 12.09.2009 declaring total loss of Rs. 68,02,570/-. The assessment completed on 16.12.2011 u/s. 143(3) of the Act. The Assessing Officer (AO) while making the assessment, disallowed various expenses claimed by assessee as referred in paragraph nos. 3 & 4 holding that the same are not related with business. The AO further treated the difference between sale and purchase of Rs. 64,15,283/- as ‘Income from Other Sources’. On appeal before the ld. CIT(A), the ld. CIT(A) concluded that the transaction shown by assessee are colorable. There is no profit or loss actually arose from such sale and purchase. It was further concluded that the only benefit, the assessee derived is set off of the sale tax which amount cannot be ascertained in the absence of sales tax return of the assessee. The ld CIT(A)directed the AO to determine the set off of sale tax, if availed by the assessee by looking into the returns with the Sales Tax Department. Thus, being aggrieved by the direction of ld. CIT (A), the assessee has filed the appeal. The revenue has also filed Cross Appeal against the direction to verify the sale tax set off.
5. We have heard ld. Authorized Representative (AR) for assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The ld. AR of the assessee argued that ld. CIT(A) erred in treating the benefit of sale tax set off taken by assessee as income and tax it under the head “Income from Other Sources” without giving any notice of enhancement as provided u/s 251 which is against the set judicial proposition of law. On the other